Finance Finance News ‘Benefit of hindsight’: Turnbull admits Coalition tardiness on banks

‘Benefit of hindsight’: Turnbull admits Coalition tardiness on banks

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The former prime minister said Australia's climate debate has been hijacked. Photo: Getty
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Malcolm Turnbull has issued a public mea culpa for failing to call a royal commission into the banks earlier, admitting the inquiry was the “shock treatment” the industry needed.

In his first public response to the final report, the former prime minister insisted on Tuesday that it was never his goal to go easy on the banks.

Instead, he said his focus was offering compensation as quickly as possible. But Mr Turnbull conceded this goal, including establishing a compensation fund, was delayed by the royal commission. 

“In some respects we have had the best of both worlds, or I won’t say worst of all worlds, in the sense that we have had those changes,” he said.

At the same time, we have had the royal commission, although you can make a very good case for saying that it was started maybe a year later than it should have been.”

In a public intervention that will overshadow the first response of Prime Minister Scott Morrison to the royal commission’s final report, Mr Turnbull also claimed the government was “dusting off” a compensation scheme he helped design.

“Royal commissions can’t provide compensation, all they can do is inquire and write a report. So, we were well advanced in a compensation scheme to deal with the victims of various banks’ malpractices,” he said.

“That was put on hold when the royal commission was set up. So, I would expect that Scott Morrison will dust that off and get that back out there because it is vitally important that people are compensated.”

Mr Turnbull said he was shocked by what Commissioner Kenneth Hayne’s banking inquiry uncovered.

“There were some cases, examples of wrongdoing, that came out in the royal commission that shocked me in the sense that I did not believe the cultural failures had been as bad as that,” Mr Turnbull said.

“I believe with the benefit of hindsight we should have held the royal commission earlier. But I think what the royal commission has done is provided something of a shock treatment to really ram home the need for that cultural change. So I think that is going to be very important for faith and confidence.

“You have got to believe when the bank says, ‘invest in this or take this loan or take this approach’, that they are acting in your best interests.”

The Coalition was quick to point to Mr Morrison’s own mea culpa on Tuesday, ahead of his first public comments on the report in Townsville. 

In September, Mr Morrison told parliament that he regretted not calling a royal commission earlier.

“It is true that I do regret that, of all the problems I was seeking to address in the banking and financial industry, the real hurt being felt by Australians also needed to be addressed,” Mr Morrison said.

“I regret that we did not do it earlier. I am pleased it is happening now.”.

In comments that will anger Mr Morrison, his predecessor also chose to endorse Liberal turncoat Julia Banks.

“Julia Banks is an outstanding parliamentarian. She came to parliament with life experience as a lawyer and in the business world. She is really an outstanding representative,” Mr Turnbull said.

“She has explained why she left the Liberal Party and she has done so in her own words and I respect the decision she has taken.

“I believe the people of Flinders will have a very stimulating contest between her and Greg Hunt and no doubt the other candidates.”

Ms Banks announced earlier in February that she would quit her inner-Melbourne seat of Chisholm at the coming election to take on Health Minister Greg Hunt as an independent in Flinders.

Asked if Mr Morrison can win the federal election, Mr Turnbull said anything was possible. 

“Every election can be won and all Australian elections are close,” he said. 

“I wish him all the best.”